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Saving money: big and little wins

Charlie lives with his wife and three daughters outside of San Francisco. He runs PearBudget, enjoys being outdoors, and really loves a good library.

One of the funnier “religious wars” I’ve seen when it comes to money is fighting between people in favor of “big wins” versus the people in favor of “little wins.”

“Little wins”-ers want to be as frugal as possible, to look for ways to save money wherever they can. “Big wins”-ers see those little steps as a waste of time. Instead, they look for a few big areas where they can save money, and focus their energy there.

Which of these approaches is better? Which one will do a better job of getting your family on solid financial footing?

Are you a “big wins”-er or a “little wins”-er?

“Little wins”-ers clip coupons. Or turn off the lights when they leave the room so as to not waste electricity. They probably pack lunch instead of dining out at the office.

“Big wins”-ers do things like refinance their mortgage, or negotiate a lower rate on their car insurance, or work on getting a higher-paying salary.

So which one is more effective?

It’s actually kind of a trick question. The truth is, neither one is more important than the other. You’re best served by focusing on both the big things and the little things. The problem: We’re probably drawn to one or the other, and it’s easy to dismiss the one that makes you less comfortable.

Step out of your comfort zone

For example, I really don’t like haggling. Some people love it. But the idea of calling up my insurance company and asking them to lower my insurance premiums makes me really uncomfortable.

I don’t like confrontation, or rocking the boat, or being presumptuous. I don’t want to run the risk of insulting someone by trying to barter down. “They must have good reasons for asking that price,” I tell myself, “so I can either buy it at that price or walk away.” I’ve gotten very good at walking away. I’m a “little wins”-er by nature.

But my insurance company would prefer to keep me on at a lower rate than completely lose me as a customer. And the worst that can happen is that they say “no” … so it’s really something I need to work on. And when I step back and think about how I could save hundreds of dollars a year by making a few quick phone calls, I realize how badly I need to swallow my pride and get on the phone.

On the other hand, there are plenty of people who only go after things like getting a raise, and refinancing their home, and who totally ignore things like turning off the lights, or buying things used at yard sales, or drinking water instead of soda when dining out. Only doing “big things” is a problem, too.

By practicing frugal habits, by focusing on little wins, you remind yourself daily that a bit of sacrifice isn’t that bad. Would you like to buy that new pair of pants? Sure. Will you survive if you don’t? Absolutely. Will “going without” help you pay off your debt / build up your reserve / save for that more-important thing you’re waiting to buy? Almost certainly. The “little wins” that you can get are not meant to grind you down. They’re just small hurdles that you run into a lot and that — all together — really add up.

So you really should be looking at both the every-day ways to save money and the occasional big-ticket ways to save money. And, for most of us, this means stepping outside our comfort zone.

Focus on big wins for surprising — and long-lasting — consequences.

If you find yourself drawn to the “little wins,” see what you can do to challenge yourself and to push the boundaries of what you’re comfortable with. This can be something you and your spouse can do together. Think of it like a team-building exercise.

Call your credit card and ask for a lower interest rate.

Call three different car insurance companies, and then call your own and try to negotiate the rate down.

Evaluate your monthly recurring costs (like your cable bill, phone bills, and internet bills) and see if you can “close, cut back, or consolidate” them to save money.

Look at your salary history and ask your boss for a raise. (Sometimes setting a deadline on when you’ll ask can help!)

If you’re uncomfortable with any of these, you can try “bribing” yourself: Look at the amount you’ll save each month (say it’s $50), and take the first month’s savings and spend 100% of it on something fun that you wouldn’t normally get for yourself. Every month after that is gravy.

Focus on little wins to create a rhythm and a focus in your family’s life.

Talk about both kinds of wins with your kids, to teach them more about how to be responsible about money.

Just like advice on “how to talk with your kids about sex,” you should talk about money early, often, and in an age-appropriate way. Talk with them about what money is for, where it comes from, and how to use it well. And show them both the big and little ways that you can save money on the things that don’t matter as much, so you have more money for the things that do.

Are you a “big wins”-er or a “little wins”-er by nature? What are some of your favorite ways to save money? And have you ever overcome some discomfort in order to save money?

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Comments

Thanks for this post! and for pointing out the benefits of BOTH approaches. Self-discipline is usually – well, almost always – the hardest part. Making your brain and heart agree on the same thing is no small feat…and teaching our kids to do the same thing will have LONG lasting effects on their pocketbooks and their maturity level. Great post – thanks so much!

Oh, I’m a big win type of person. I want to see a substantial savings or I’m just plain lazy but I totally know that the littles can add up so I definitely need to be more intentional about this. My mother lives with us and she’s a little wins type turning off lights and wielding coupons for everything. There’s a lot to be learned both ways. I like your take on this. Thanks.

Great post, Charlie! I’m with you at hating haggling. We’ve done it (to the best of our lame, introverted abilities) but both hate it. Email has been really helpful to get around the confrontation bit. For example, we’ll just email the salesperson, “Company A will save us this much and Company B this much, what can you offer us?” we’d never be so bold in real life! We’ve negotiated lower rates and cheaper sticker prices through email and gotten deals. It’s a good work around for haggle-haters.

I never ever thought of it this way. I’m for “little wins” and my husband is for “big wins”. Almost exactly with the examples you provided. Wow. This helps me appreciate him even more, and know that we’re a good team. He leads our family in awesome big financial decisions (which house to buy), and I steer us around in the day to day decisions (keeping the grocery budget in check, so as to continue saving money every month…to pay the mortgage on that house).
Great thoughts.

Both are important, for sure. I find it more difficult right now to focus on the really ‘big’ win of bringing in more income because of my small kids and the current job market. So right now my focus is more on controlling expenses.

One thing that’s been really helpful to me regarding negotiated prices is to be educated about the price of comparable products & services. Like the last time we bought a car, we checked out multiple consumer sites, looked at what was offered for sale in our area, and contacted multiple dealers so that when we finally bought, we knew we were getting a good deal. At the opposite end, I just sold some jewelry and didn’t thoroughly research the prices beforehand , and in hindsight, I would have been in a better position to negotiate and most likely could have gotten more money if I had been prepared.

I agree it is a red herring to think you should do either big things or little things but not both! But in my experience, some people have trouble getting above the little things, especially if that is all they have ever worried about. This is probably because of historical gender roles. For some families, hubby did the big things (like earning) and the wife did the little things (like cutting back on spending). Time to shake it up.

You just motivated me to call my credit card company and ask them to lower my interest rate. I HATE debt and spent my life avoiding it until a divorce left me financially back at zero. Literally. I stuck ex-hubby with the pricey imported SUV and bought a 7 y/o Honda Accord, paid it off, and now hacking away at that one dadgum credit card…. Love clipping coupons, line-drying clothes, and saving pennies everywhere i can!

My husband and I are also on the opposite side of the winners line but in our case, it causes more disagreements then collaboration. I like the idea of thinking about in the terms of being well rounded though. This is just another example of how my husband and I balance each other out but just like yoga balance isn’t always easy!!

It may not be what we want to hear, but most of the blame for our—and America’s—economic difficulties may be placed on our own shoulders. If our citizens would stop spending like reckless children, and become the financially aware adults that our nation needs, we might just be able to get America’s economy rolling again. And Americans might finally be able to stay out of the red.

YES! Both need to be a focus if you’re really trying to be frugal, pay off debt, save more, and simplify your finances.

I always do (and rec to readers) an expense audit which allows you to focus on saving in big ways. I usually perform them once a quarter. This includes things like shopping for insurance, checking mortgage rates, and checking in on healthcare spending, etc.

The little wins though take up a good majority of our day to day lives, and are just as essential. Shaving $100/month off your spending is $1,200/year! That’s nothing to sneeze at.

Too many times we take an either/or approach when both are hallmarks of financially successful and frugal people.

Thanks for giving a name to the roles in which my husband and I find ourselves. He is the “big win” guy and I am the “little wins” -er. This has caused recurring disagreements and undo stress on both of us as we just don’t realize the validity of each other’s philosophy. Trying to give a little from both sides should be helpful.

I definitely care about both… but am perfect at neither I am willing to spend money purposefully on things we care about so will work at cutting where I can to make this possible. Sometimes it feels ironic how I’ll take care to save a dollar here, ten bucks there, and then spend a chunk of $ on craft supplies for the kids (or whatever). But unless your funds are unlimited you’ve got to make some give/take decisions, right? (Actually, even if my funds were unlimited I’d be careful to steward well my finances)

Yikes- I’m neither. I find them BOTH hard. I hate haggling. But I also find it really hard to resist small things when I think “what’s $10? It could make my life easier/save me time…” But this post is helpful- I’ll work on it!

Wow. You’ve really given me a framework to understand the different approaches my wife and I take. I go for the big wins, she for the little. I’ll have to share this with her. Maybe well understand each other a little better.

I’m certainly the most frugal one in the house. I focus on the little things. The little cuts in grocery spending, the lights, and TV being turned off. Turning the heat down and washing my clothes in cold water. My husband is the refinance kinda guy. He negotiates and loves it! Good for us that we are so opposite in this realm that it works. Bad for us that we spend and save so differently that we have NEVER shared bank accounts! lol

We are definitely “little win”er’s. I don’t like to haggle either. I prefer the more passive approach, lights off, lowering the heat etc…
But, we are learning both right now. As we moved in with my parents to save money, and still are trying to live frugally, all in hopes to get our dream house ….someday, sooner than later.

Great article. The only thing I am going to contradict is the negotiating a lower rate with your insurance company. I am an insurance agent who deals with this question all the time, we can’t lower your rates without a sacrifice to your coverage or raising your deductible. Rates are set by the state, we cannot give you a lower rate for the same coverage. If your agent tells you that they lowered the rate, they lowered your coverage or raised your deductible. That being said, you don’t always need the amount of coverage you have, so yearly review with your agent is beneficial.

I was a “small-win” person when our income and family were smaller. Now that both have grown a bit, missing the smaller savings can turn me into a guiltmonger if I am not careful. But, since I trained myself to do many of them automatically during our leaner years, I’m still saving in those areas.

We attempt to do both, small and big wins (and have various degrees of success in both). Mildly amusing side note: we decided our last bad winter (here in MN) that it would be cheaper to have the heat a little higher (literally 2 degrees helps so much) than to move to a new state, because I was threatening to do just that, despite DH’s good job and our paid-for house. I simply cannot handle the extreme cold, no matter how much wool I wear!

My 3 kids are all 10 and up now and 2 of them have really caught on to the little things mentality of their mom. My daughter brought me all the coupons out of the free family fun magazine I gave her to look at last night. My son when he searches for video games now looks at several sights for the best price and asks me to look up discounts codes. It makes their frugal momma tear up a bit when they do this.

I think I’m a combination of both but I think some of it depends on where you are financially. When I was first starting in my career, saving money by packing my lunch (just as an example) really added up. Now that my salary has almost tripled, I crave bigger wins because they are more to scale. Anyone else feel that way?

I totally agree that both ways are ideal. But I tend to go for the little wins, because, like you, I don’t like rocking the boat. Plus not too long ago, I got burned. Talked myself into calling my credit card company to see if they could reduce the rate on my card and I ended up with a lecture from the customer service rep about being smarter with my credit! Then, a few weeks later I got a a letter from the credit card bank saying they were reducing my credit LIMIT, not my rate. Seems like I opened their eyes to my account. So in that sense I am a little gun-shy and for now will just continue with my little win ways.

I believe I am a little of both, the big and little wins. It depends actually on the current need. If it is insurance renewal time, or mortgage refinance, then I have to do it. No question. The little wins come every single day, more often than the big wins. There is discipline needed here. It’s tricky, yes and requires that I don’t lose focus or grip on what I should do.

I feel as though little wins help you gain confidence to get the “big” win. Little steps are the key to big steps or big success. I find that having these “little” wins keep me motivated to do more. Its kinda like the snowball effect. But I do find that sometimes you get too comfortable doing small things to achieve the “little” wins that you only stick to that and that only. So a tip – switch it up! Get small wins but attempt big wins in-between.